And are your "people" those very same aspirants or just their champions?
I read often about young professionals who can't even aspire to a pokey 1-bed flat and with vested interests promising that property will go up for ever at better than wage-inflation rates the logic of this is absurd.
Let's not get carried away into thinking all "people" are over-reaching themselves.
Of course a single anecdote reveals nothing but what would you say does tell us anything about the market?
...sorry, I meant to say about this market in particular. It appears to be transitional and the market is mixed.
-snip-
What a truly appaling post. I'd be all for a tube full of ignorant, bigoted people like you being blown up. Might clean up the gene pool somewhat.
"Roger Cumberbun" wrote
This is a UK group - we're talking about the UK.
"Roger Cumberbun" wrote
Nah - the bankruptcy laws here just got much *easier*.
"abelard" wrote
Tee hee.
"curiosity" wrote
Where do you read this "often"?
"curiosity" wrote
Why? Just because it's probably true, but is a good argument against your point-of-view?
but here's what I wrote:-
I read often about young professionals who can't even aspire to a pokey 1-bed flat and with vested interests promising that property will go up for ever at better than wage-inflation rates the logic of this is absurd.
Please don't base your question on a deliberate misquote.
And what do you think is my point of view?
Five years ago I could have bought my neighbour's three-bedroom house with a 100k deposit and 2x income mortgage. Today I'd be lucky to get a crappy two-bedroom house in the less fashionable villages a few miles away with a 100k deposit and a 4x income mortgage.... what has happened in that time to justify the price of houses more than doubling? Why are two-bedroom _flats_ on my road now 'valued' at twice what my neighbour's three-bedroom house sold for in 2000?
Why would I go into perpetual debt for a mortgage on a shithole when I can save more money and move to a country where I can buy a four-bedroom house for cash? What's so special about Britain that houses here are magically worth so much more?
Ah, nothing other than a few years of artificially low interest rates, 'buy to let' mania, 'lie to buy' mortgages and a housing bubble.
Mark
wrote
Have you ever thought that, instead of being *over-valued now*, that houses were in fact *under-valued back then* ?
wrote
Well, you could also ask "what's so special about India/China etc, that labour (incl.skilled & professional) there is magically worth so much less than here?"
"curiosity" wrote
OK, let's try again. Where do you read the above "often"?
"curiosity" wrote
Someone who thinks that many people aren't "over-reaching themselves"?
For a while the market has been kept going by people already on the ladder stretching themselves to upgrade. But all the time basic housing has been moving further and further away from what people at the bottom of the market (even on average earnings) can realistically afford. BTL took up that slack for a while, but the "I'm all right Jack" market is now discovering just how far away from reality it's moved.
IMO anyway.
Andrew McP
Prices back then were within historical norms relative to incomes: they're now the highest ever, or close to it. What's changed in the last few years to justify such a move?
Or you could answer the question instead?
Mark
"Andrew MacPherson" wrote
What do you think "they" could afford in the 1970's, when both interest rates and inflation was raging?
How much do you think "they" could afford in 1990, with both base rates at
15% and 'high' house prices at the same time?
It's all to do with simple supply and demand. The current situation seems to happen at the peak of any property "boom", and lots of people feel hard done by, or left out, because they arent on the ladder, and cant get on it - where they want to.
You will probably also find that 20 years ago, you could have bought your neighbours house for around £30K/£40K, and when it rose to around £80K at the end of the last boom, (1992+/-), there would have been people saying the same as you are now.
Give it 5 or 10 years, and it is likely that today's prices will seem cheap. E.g. if prices rise at an average of 5% per annum, they will double again in 12 years or so - but it will probably happen over a short space of time, thus making it dramatic.
No reason whatsoever. In fact, if you can do it, what are you waiting for??
Supply and Demand.
What's artificially low about our interest rates - AFAIK, they are even lower in many other parts of the world - Europe, USA, Japan??? It seems to me that they are artificially high if anything.
In message , curiosity writes
The next bit of my post
Analysis of a number of transactions compared over a reasonably long period - e.g. the various house price indices.
So we're building vast numbers of new houses and flats, and supply is going up: to the extent that houses available for sale are at record levels in many areas. Where's the demand to justify massive price increases when supply is at record levels?
Ah, BTLs borrowing vast amounts of money at artificially low interest rates. An entirely artificial 'demand' that's just dried up in most of the country.
Indeed. And then it crashes and prices drop to sensible levels again.
My visa.
_What_ demand? What has changed about demographics in the UK in five years to justify a tripling of house prices?
Ah, nothing.
Other than the fact that they're about half the historical norm, and will have to be increased soon if we're going to stay around the historical norm relative to US rates?
Mark
wrote
Interest rates?
The cost of (even repayment) mortgages now on the average-priced house, is actually *lower* than it was 15 years ago (as a multiple of average earnings).
wrote
I thought I had ;-)
OK, if you can't work it out yourself from my comment :-
The biggest cost of a house is for the labour -- bricks & cement etc are relatively cheap. So the price depends on the level of earnings of those building the house.
[Actually, even the price of bricks/tiles etc is dependent on the level of earnings of the people making them...]
Which is why house prices fell in real terms on both occasions!
More because they've had a great 6 months - Wimpy has gone up ~30%, Bovis and Barratt have gone up ~40%. That was quite clearly unsustainable - it's just the normal neurotic stockmarket at work - anyone reading anything into 1 days/weeks/months share price movement is a fool.
Daytona
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